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Bumblemee asked in Business & FinanceInvesting · 10 years ago

Is this client suitable to invest in warrants?

He is a very big risk taker and is the CEO of a major company. His shares are currently trading at $10 per share and worth $65m. His goal is to generate gains and protect his shares and gains without a large capital outlay in the event of his share prices falling.

I need a list of suitable questions to ask/info to provide to see if he is suitable.

What type of warrants would be best suitable and why?

1 Answer

Relevance
  • John W
    Lv 7
    10 years ago
    Favorite Answer

    Your question isn't clear to me. Warrants are similar to call options except that they are issued by the company themselves such that when exercised, new shares are issued whereas with a call option, the derivative is created by a third party who is then contractually obligated to provide for the shares when the contract is exercised. Warrants were typically issued as a sweetener to encourage people to buy bonds and used to be more common due to a tax advantage which no longer exists. I don't see how you are trying to use warrants in the context of a client's suitability to invest or what you would mean by types of warrants. Therefore the only question that I could come up with is "Do you know what you're talking about?" and I mean no disrespect in asking that but it does seem that your question is very confused.

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